Business Organizations Law Commons^™

Innovating Inclusion: The Impact Of Women On Private Company Boards, Jennifer S. Fan

Articles

Eight percent—that is the percentage of women who serve on the boards of directors of private high technology companies. Private companies, particularly high technology companies, have transformed citizens’ daily lives, while the unprecedented availability of private capital has allowed those companies to remain private longer. This rise, however, has also obscured some of the weaknesses of private companies, which are not subject to public disclosure and regulatory oversight: rampant sexual harassment, the lack of women leaders in technology companies, the relative absence of female venture capitalists, and the dearth of female board members, to name a few. Yet thus far, …

The Futility Of Walls: How Traveling Corporations Threaten State Sovereignty, Darren Rosenblum

Faculty Publications

Inversions—mergers in which one firm merges with another abroad to avoid taxes in its home country—have spread as globalization has reduced many of the transactional costs associated with relocating. As firms acquire the power to choose the laws that govern them, they challenge the sovereignty of nation-states, who find their ability to tax and regulate firms depleted. States and firms compete in a game of cat and mouse to adapt to this new global reality. The subversion of state power by these firms reveals the futility of walls, both literal and regulatory. This Essay describes the phenomenon of these “traveling …

Unintentional Irony In Landmark Decisions Of The Delaware Supreme Court Regarding Corporate Law, Steven Cleveland

Faculty Articles

No abstract provided.

Rwu Law News: The E-Newsletter Of Roger Williams University School Of Law January 2019, Roger Williams University School Of Law

Life of the Law School (1993- )

No abstract provided.

Private Ordering And Improving Information Flow To The Board Of Directors: The Duty To Inform Bylaw, Jennifer O'Hare

University of Richmond Law Review

It seems that almost every day there is another report of a corporate scandal at a public company. Whether the scandal involves sexual harassment by senior management or widespread illegal conduct by employees, the first question asked by investors and the media is usually, “Where was the board?” And the board’s response is almost always, “We didn’t know.” Directors of public companies rely on officers to provide the information the board needs to manage the corporation, but, strangely enough, officers may not even be legally required to provide information to the board. The Delaware General Corporation Law is silent on …

A Global System Of Work, A Global System Of Regulation?: Crowdwork And Conflicts Of Law, Miriam A. Cherry

All Faculty Scholarship

On-demand platforms are changing and reshaping our conceptions of both the firm and the work relationship in far-reaching and critical ways, allowing companies to hire workers and to seek customers across national boundaries. Confronted with low pay, wage theft, and other problematic working conditions, gig workers around the world have turned to the courts, attempting to invoke the protections of traditional labor and employment law. While some commentators believe existing forms of labor and employment regulations can stretch to cover on-demand work, others have called for new legal initiatives specifically crafted for online platforms. The goal of this paper is …

Worker Participation, Sustainability, And The Puzzle Of The Volkswagen Emissions Scandal, Matthew T. Bodie

All Faculty Scholarship

In September 2015, Volkswagen's "clean diesel" technology was exposed as a sham. Not only were the company's vehicles discharging dangerously high levels of nitrogen oxide, but VW had intentionally rigged its emissions systems to cheat on environmental tests. In the wake of resignations and criminal investigations, the company's governance system came under justifiable attack. Were VW's famously worker-friendly governance policies to blame? This Chapter examines the root causes of the emissions scandal and concludes that VW's governance culture suffered from dictatorial leadership as well as a cozy relationship between management and labor leaders. This culture of complacency led to a …

Labor Interests And Corporate Power, Matthew T. Bodie

All Faculty Scholarship

Labor unions exert significant power through collective bargaining, pension fund investing, and political advocacy. But in each of these areas, unions face inherent structural limitations that severely constrain these powers. Workers need participation rights in corporate governance to overcome the multiplicity of forces arrayed against them. And rather than obviating the need for unions, worker corporate power would facilitate a different kind of labor representation — a transition to labor power that advocates for occupational interests and forms coalitions across the shifting political interests of different worker groups.

Being True To Trulia: Do Disclosure-Only Settlements In Merger Objection Lawsuits Harm Shareholders?, Eric L. Talley, Giuseppe Dari‐Mattiacci

Faculty Scholarship

A significant debate within mergers and acquisitions law concerns the explosive popularity of the “merger objection lawsuit” (MOL), a shareholder action seeking to enjoin an announced deal on fiduciary duty grounds. MOLs blossomed during the Financial Crisis, becoming popularly associated with “shareholder shakedowns,” whereby quick-triggered plaintiff attorneys would file against – and then rapidly settle with – acquirers, typically on non-monetary terms containing modest added disclosures in exchange for blanket class releases and attorney fee awards. This practice unleashed a torrent of criticism from lawyers, commentators, academics, and (ultimately) judges, culminating in a doctrinal shift in Delaware law in the …

Corporate Control And The Regulation Of Controlling Shareholders, Zohar Goshen, Assaf Hamdani

Faculty Scholarship

In this chapter, we outline the theory of idiosyncratic vision and explored its implications. Our theory can be summarized as follows: First, while investors value control because it offers them protection from agency costs, entrepreneurs value control because it allows them to pursue their idiosyncratic vision. Second, any contract between entrepreneurs and investors represents a balance between the entrepreneurs’ freedom to secure their idiosyncratic vision and the investors’ protection against agency costs. Third, the investors and entrepreneurs will allocate cash-flow and control rights through the bargaining process to achieve this balance.

In addition, this chapter demonstrates that ownership structures are …

Shareholders United?, Andrew K. Jennings

Faculty Scholarship

No abstract provided.

Mens Rea Reform And Its Discontents, Benjamin Levin

Publications

This Article examines the debates over recent proposals for “mens rea reform.” The substantive criminal law has expanded dramatically, and legislators have criminalized a great deal of common conduct. Often, new criminal laws do not require that defendants know they are acting unlawfully. Mens rea reform proposals seek to address the problems of overcriminalization and unintentional offending by increasing the burden on prosecutors to prove a defendant’s culpable mental state. These proposals have been a staple of conservative-backed bills on criminal justice reform. Many on the left remain skeptical of mens rea reform and view it as a deregulatory vehicle …

Citizen Capitalism: How A Universal Fund Can Provide Influence And Income To All (2019), Lynn A. Stout, Sergio Gramitto, Tamara Belinfanti

Books

Corporations have a huge influence on the life of every citizen--this book offers a visionary but practical plan to give every citizen a say in how corporations are run while also gaining some supplemental income. It lays out a clear approach that uses the mechanisms of the private market to hold corporations accountable to the public.

This would happen through the creation of what the authors call the Universal Fund, a kind of national, democratic, mega mutual fund. Every American over eighteen would be entitled to a share and would participate in directing its share voting choices. Corporations and wealthy …

A New Look At Criminal Liability For Selling Dangerous Vehicles: Lessons From General Motors And Toyota, Steven B. Dow, Nan S. Ellis

UC Law Business Journal

Automobile safety is one of the most serious public health issues facing our country. In addition to the costs in terms of personal injury and death, automobile accidents cost society billions of dollars in lost productivity and medical costs. In 1966, there were over 50,000 deaths from automobile accidents. By 2015, this number had fallen to approximately 35,000 deaths and 2.4 million injuries resulting from automobile accidents. By some measures, this is a remarkable reduction that might lead us to conclude that automobile safety is no longer an important public policy concern. This article argues that automobile safety is still …

Competing To Cut Carbon: State Policies, Conflicts With Federally-Regulated Energy Markets, And Recommendations, Arshak Zakarian

UC Law Business Journal

Wholesale power markets currently face challenges from changes in federal regulations and advancements in technology, which have significantly changed the composition of energy generation sources across the United States over the last two decades. States have relied increasingly on policy to increase the presence of clean energy sources in their power mix, such as nuclear energy, due to its reliability and environmental benefits. Natural gas, wind, and solar have seen unprecedented growth in the last five years due to declining fuel source and technology costs. Utilities companies and private companies have invested significantly in infrastructure and technology research, attempting to …

A Peek Under The Hood: Why Lawmakers Should Strengthen The Current Dmca Exemption For Security And Safety Research Into Car Software, Holden Benon

UC Law Business Journal

In the last five years, society has witnessed advancements in automobile technology that Henry Ford himself could not have dreamed. Vehicle software now allows cars to drive themselves; indeed, as of December 2017, close to four dozen vehicle manufacturers have received permits from the California Department of Motor Vehicles for autonomous testing. Many of the advancements in automobile technology involve copyright law, the primary body of law that protects computer source code. Essentially, each line of vehicle source code is protected the same way a film script is protected. Just as camera directions in the script are hidden from movie-goers, …

Bad Behavior: Health Insurance Mega-Mergers, Jacqueline C. Lien

UC Law Business Journal

2015 marked the beginning of a long battle for two major health insurance companies. On July 3, 2015, health insurance giant and third largest health insurance company by revenue, Aetna, announced that it entered into an agreement to acquire the fifth largest health insurance company, Humana, for $37 billion. Following a similar timeline, on July 24, 2015, second largest, Anthem, negotiated an even bigger merger with Cigna, the fourth largest, for $54.2 billion. Officials from all four companies lauded the benefits of the mergers, stating that the synergies between the respective companies would result in enhanced health care access, quality, …

Books And Olive Oil: Why Antitrust Must Deal With Consolidated Corporate Power, Carl T. Bogus

University of Michigan Journal of Law Reform

Following an epic battle in the marketplace between Apple and major book publishers, on one side, and Amazon, on the other side, the United States Department of Justice and thirty-three states filed an antitrust lawsuit against Apple and the publishers, alleging that they had conspired to fix the prices of ebooks. Both the district court and a divided panel of the United States Court of Appeals for the Second Circuit decided the case in the government’s favor. This Article argues that government regulators and the courts took the wrong side in the dispute and did so because of fundamental flaws …

Interpreting Organizational "Contracts" And The Private Ordering Of Public Company Governance, Megan Wischmeier Shaner

Faculty Articles

Corporate law is undergoing an explosion of governance by private ordering. With increasing frequency and creativity, the charter and bylaws of public corporations are being used as tools for restructuring key aspects of corporate governance. The current focus of parties, courts, and scholars has been on the facial validity of these efforts. In light of courts’ willingness to uphold corporate governance contracting, legal battles will morph from validity challenges to interpretation disputes. Yet interpretation principles are a topic to which corporate scholars have devoted limited attention. With interpretation poised to take on an influential role in shaping corporate law and …

What Corporate Veil?, Joshua C. Macey

Michigan Law Review

Review of Adam Winkler's We the Corporations: How American Business Won Their Civil Rights.

Explaining Choice-Of-Entity Decisions By Silicon Valley Start-Ups, Gregg Polsky

Scholarly Works

Perhaps the most fundamental role of a business tax advisor is to recommend the optimal entity choice for nascent business enterprises. Nevertheless, even in 2018, the choice-of-entity analysis remains highly muddled. Most tax practitioners across the United States consistently recommend flow-through entities, such as LLCs and S corporations, to their clients. In contrast, a discrete group of highly sophisticated tax professionals, those who advise start-ups in Silicon Valley and other hotbeds of start-up activity, prefer C corporations.

Prior commentary has described and tried to explain this paradox without finding an adequate explanation. These commentators have noted a host of superficially …

Book Review: Global Lawmakers: International Organizations In The Crafting Of World Markets By Susan Block-Lieb And Terence C. Halliday, Melissa J. Durkee

Scholarly Works

Susan Block-Lieb and Terence Halliday gradually build up an empirically grounded, meticulously realized argument that individual lawmakers matter. When one allows facts to inform theory rather than the other way around, the authors show, what becomes clear is that individual lawmakers are not just governmental delegates, but a whole variety of professionals, industry association representatives, and others with some stake in the lawmaking process. These actors work not just through formal processes, but also through an array of informal ones. Most importantly, their presence matters to the content of the legal norms that take hold around the world. The book …

Corporations And Sustainability, Beate Sjåfjell, Christopher Bruner

Scholarly Works

This chapter introduces the Handbook, providing an overview of its aims and structure, as well as the core research questions that the contributions to it collectively address. It discusses sustainability-related problems associated with the legal form of the corporation, and provides background on state-of-the-art research in natural sciences and other relevant fields that inform our understanding of sustainability. It concludes with specific research questions and a presentation of the Handbook’s structure.

Teaching Communication Skills In Transactional Simulations, Eric J. Gouvin, Katherine M. Koops, James E. Moliterno, Carol E. Morgan, Carol D. Newman

Faculty Scholarship

This Article describes the role of communication exercises in transactional law and skills education, and provides several examples of such exercises. After a discussion of fundamental differences between communication in the context of litigation and transactional law, the Article discusses exercises designed to improve written communication skills, including the use of e-mail, in the context of transactional law. It follows with a similar discussion of exercises focusing on oral communication skills, including listening, interviewing, counseling, negotiation, and presentations. The Article concludes with examples of exercises combining oral and written communication skills in the context of simulated transactions.

Basic And Non-Basic Tax Tips For Leasing Lawyers, Bradley T. Borden

Faculty Scholarship

No abstract provided.

Board Diversity By Term Limits?, Darren Rosenblum, Yaron Nili

Faculty Publications

Four-fifths of the corporate board seats in the United States are held by men and a shocking number of companies lack any female representation on their boards. While institutional investors have pushed these companies for change, California took a more aggressive step and followed several European countries by mandating a quota for board representation. Heated argument has ensued over what diversity we should prioritize and what mechanisms should be used to promote diversity. Yet could these challenges be avoided altogether through the use of term limits?

This Article is the first academic inquiry exploring the connection between term limits and …

California Dreaming?, Darren Rosenblum

Faculty Publications

Over the past few years, California became the setting for shocking tales of sex inequality and abuse in Hollywood and Silicon Valley. Decades after women achieved educational parity, men still run the corporate world. In response to these stories exposed by the #MeToo movement, California joined the transnational corporate board quota movement by converting its voluntary quota into a hard one. Will California’s first mover status overcome constitutional objections and inspire other jurisdictions to act. Or is just utopian dreaming, California-style? This Essay argues that despite its many flaws, the quota may succeed in curbing male over-representation on corporate boards. …

After Corwin: Down The Controlling Shareholder Rabbit Hole, Ann Lipton

Publications

As Delaware has developed its doctrine with respect to controlling shareholders, its view of their relationship to directors has evolved. This evolution has produced some pronounced inconsistencies with respect to the weight placed on director approval of controlling shareholder action. The recent Delaware Supreme Court decisions in Corwin v. KKR Financial Holdings LLC, Kahn v. M & F Worldwide Corp., and C & J Energy Services, Inc. v. City of Miami General Employees’ and Sanitation Employees’ Retirement Trust introduced further uncertainty into the mix by making the determination as to whether a transaction involves a controlling shareholder practically outcome-determinative of …

If Rockefeller Were A Coder, Carla L. Reyes

Faculty Journal Articles and Book Chapters

he Ethereum Decentralized Autonomous Organization (“The DAO”), a decentralized, smart contract-based, investment fund with assets of $168 million, spectacularly crashed when one of its members exploited a flaw in the computer code and stole $55 million. In the wake of the exploit, many argued that participants in the DAO could be jointly and severally liable for the loss as partners in a general partnership. Others claimed that the DAO evidenced an entirely new form of business entity, one that current laws do not contemplate. Ultimately, the technologists cleaned up the exploit via technological means, and without engaging in any further …

Craft Beer And The Rising Tide Effect: An Empirical Study Of Sharing And Collaboration Among Seattle's Craft Breweries, Zahr K. Said

Lewis & Clark Law Review

This qualitative empirical research project studies Seattle’s craft brewing industry as a thriving entrepreneurial ecosystem that displays widespread collaboration and innovation. Drawing on data collected in 22 face-to-face formal interviews conducted with industry participants, the Article explores the community’s attitudes, practices, and norms with respect to collaboration and intellectual property (IP). It joins a growing body of qualitative empirical IP scholarship that maps misalignments between law and practice “on the ground,” seeking to offer a more accurate and pluralistic account of an innovative industry. The craft brewing community in Seattle cooperates extensively while continuing to compete actively for consumers. In …